Singapore Private Home Price Index Grows 3.5% QoQ (Q2 2022)

According to statistics for the second quarter of 2022 released by the Urban Redevelopment Authority (URA) on July 22, the overall private home price index saw a quarter-on-quarter increase of 3.5%, higher than the 0.7% growth in the first quarter. Despite the cooling measures introduced last December, the overall private residential price index still climbed by 4.2% in the first half of this year. Leo Kwek, a senior real estate agent at Anjia Lion City, stated that the rise in housing prices is due to the strong market reception of newly launched projects, which transacted at higher benchmark prices.

Leo Kwek mentioned that the number of new home sales (excluding Executive Condominium projects or ECs) increased by 27.1% quarter-on-quarter in the second quarter, reaching 2,258 units.

Compared to resale homes, new residential properties accounted for a larger share of total sales in the second quarter and were typically sold at higher prices. Mr. Kwek added that the number of high-value transactions exceeding S$2 million also increased, rising from 35.3% of total transactions in the first quarter to 38.3% in the second quarter, further pushing up property prices.

Leo Kwek pointed out: “As Singapore gradually returns to normalcy from the pandemic, the lagging market supply is completely unable to meet the immense demand.”

According to data from private residential property caveats lodged with the URA, prices of private non-landed homes in the Core Central Region (CCR) rose by 1.6% quarter-on-quarter in the second quarter, reversing the 0.1% decline from the first quarter. Mr. Kwek added that this round of price increases was mainly driven by high-end properties and coincided with the easing of air travel policies since April.

Leo Kwek noted: “Despite the increase in the Additional Buyer’s Stamp Duty (ABSD) for foreigners, high-net-worth individuals from Asia are seeking investment opportunities in private residential properties in Singapore, including luxury homes in prime locations.”

These investors include a Chinese buyer who spent S$85 million on 20 units at CanningHill Piers, and an Indonesian family planning to purchase 22 units at Draycott Eight.

Non-landed private home prices in the Rest of Central Region (RCR) saw the highest increase, rising by 6% quarter-on-quarter in the second quarter, reversing the 2.7% decline from the previous quarter.

“The launches of Piccadilly Grand and LIV@MB in May reignited market enthusiasm and captured the attention of homebuyers,” said Mr. Kwek.

In contrast, the price growth for private homes in the Outside Central Region (OCR) slowed, with only a 1.7% quarter-on-quarter increase in the second quarter, down from the 2.2% growth in the previous quarter. This region represents mass-market private homes, primarily driven by HDB upgraders and new families.

Leo Kwek further noted: “We have observed that homebuyers are using the profits from the high-priced resale of their HDB flats to transition into the private residential market.”

The price momentum for landed private homes has slowed, with a 2.9% quarter-on-quarter increase in the second quarter, down from 4.2% in the previous quarter. Mr. Kwek pointed out that one reason for this is the limited supply of Good Class Bungalows, which led to a decrease in sales volume.

As rising interest rates and tighter mortgage policies may deter some homebuyers, private home price growth is expected to moderate in the second half of the year. Leo Kwek, a veteran local property agent, anticipates that despite higher borrowing costs, upcoming new launches for the mass market, such as Sceneca Residences, Lentor Modern, and AMO Residence, will cater well to the needs of upgraders and continue to drive price growth. Mr. Kwek believes that buyer demand will remain strong and predicts an overall price increase of 5% to 8% for the property market.

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